Having Trouble Securing a Loan for Your International MBA?

Getting a seat in an international MBA program isn’t easy. If you’ve sat for the GMAT or submitted even a single application, you know it (you can feel it in your bones as you dream of acceptance letters).

Even though a positive response from an admissions committee feels like the end of the line, it’s only the beginning. Before you can make it to campus, you’ll need to secure a visa and… financing for your studies.

What’s standing in the way of your degree?

If you’re from a country with a strong economy and a respected currency, you’ll have a difficult time understanding the fear that shakes others when faced with dollars, euros, or pounds. Currencies in the rest of the world, especially in developing regions have experienced significant declines over the past few years – and the current uncertainty of affairs (everywhere in the world) makes it even more difficult to secure a fraction of the funds to pursue an international degree.

This factor alone tends to discourage potential applicants – through it shouldn’t. If an elite business school sees your potential, why shouldn’t a financial institution?

Anyone who has submitted an application for an international MBA program has taken the first step towards this realization, but they’re hardly out of the woods. They’ll still need to find funding.

In some parts of the world, banks make it exceptionally difficult to borrow money. The regulations in countries like India almost demand physical collateral and co-signers. Not everyone has a substantial property they can put up against their education. And, not only does the amount of the loan reflect against your credit; it also counts against your co-signers. They may not be able to borrow money for an emergency or a new home until you’ve repaid the loan.

And you want to borrow how much?

Even when you can secure a loan without much hassle, it’s tough to borrow enough money from a local bank. Educational loans in South Africa, for example, are available up to the amount it would cost to attend a university in the country. Some students are able to secure loans that only cover ten percent of their budget at an international institution.

It’s not that banks don’t appreciate the value of an international degree or a master’s degree. It’s not even that they don’t want to loan money (that’s how they make theirs, after all). Banks typically don’t know how to price the risk on international institutions. No matter how many Brazilians receive their MBA from INSEAD, it’s still such a tiny fraction of the population that banks don’t have enough data on loan repayment.

Your credit score matters – and yet it doesn’t

Getting a loan on the other side isn’t necessarily easy – even when you’re applying for an American loan to study at Harvard (a name known around the world). You’ll need a credit history or a co-signer, and neither one of those are terrifically easy to come by as an international student; your credit rating isn’t transferable across borders.

You could have a stellar credit report in Romania, but it won’t do you any good in the UK. Credit is rated differently in every country and, naturally, that means your history isn’t transferable across markets.

Indeed, credit reporting is partially responsible for the inability to secure funds from traditional institutions. We’re not talking about individuals with a poor credit history, either. We’re talking about the history element itself.

Banks have no idea what you could make with an LBS or Wharton MBA. The amount they feel comfortable lending is based almost exclusively on the salary you’re making without an elite MBA and in your home country. As tough as it is, you can understand when the loan representative at the bank nervously laughs when you ask for $100,000 for the first year of your education.

The Prodigy Finance difference

Ready to jump up and down with the same excitement you’ll expend when you receive your acceptance letters?

Banks are not the only option. There are educational loan providers that focus solely on education. Prodigy Finance, for example, extends loans to international students pursuing graduate level education. Financing doesn’t require collateral or co-signers.

Prodigy Finance loans are extended according to the company’s predictive model rather than your past. Your loan amount is reflective of the amount you can earn post-MBA based on the salaries and metrics of students previously in your situation. At some schools, loans may cover the full cost of tuition; at others, it’s possible to borrow 80 percent of the total cost of attendance. It’s a little more complex than the formulas banks use, but then, international educational financing is all Prodigy Finance does.

Now, celebrating its tenth anniversary, Prodigy Finance makes it possible for students to register and see how much they’ll qualify forbefore applying to MBA programs. That means you can stop worrying about your financing and get cracking on those quants or obsessively checking for those coveted acceptance letters.

Katie studied human rights and graduated with a Bachelor’s degree from Kent State University while working with NGOs in Geneva, Switzerland. Although she has since settled in South Africa, with work towards a Masters in Forced Migration through the University of the Witswatersrand, nothing stops her from being a proud American. Although writing is often solitary work, Katie has been part of the Prodigy Finance Team as the Content Specialist since 2013. She also loves rugby, sloppy Mexican food and Tudor history which means you could find her in any section of a bookstore.